What is the primary purpose of creating these new Series 2022-B and Series 2022-C Conversion Preference Shares?

The primary purpose is to create a mechanism for Enbridge Inc. to manage its capital structure. These preference shares are designed to be issued upon the automatic conversion of newly issued subordinated notes. This allows the company to raise capital through debt instruments that can later convert into equity-like securities, potentially offering flexibility in its financing.

What are the financial implications for investors holding these new preference shares?

Investors holding these preference shares are entitled to receive cumulative preferential cash dividends. The dividend rate is tied directly to the interest rate of the respective subordinated notes that were converted (7.375% for Series 2022-B and 7.625% for Series 2022-C). These dividends are payable semi-annually, subject to declaration by the board and applicable laws and taxes. This structure provides a fixed income stream similar to bond interest but is classified as a dividend.

When did the offering of the associated subordinated notes conclude, and under what regulatory framework?

The offering of the 7.375% Fixed-to-Fixed Rate Subordinated Notes Series 2022-B and 7.625% Fixed-to-Fixed Rate Subordinated Notes Series 2022-C was completed on September 20, 2022. The offering was made pursuant to Enbridge's Registration Statement on Form S-3, filed with the SEC on July 29, 2022.

ENBRIDGE INC 8-K: Corporate Changes

Summary

Enbridge Inc. (ENB) filed an 8-K on September 20, 2022, to report on the creation and offering of new series of preference shares tied to newly issued subordinated notes. Specifically, the company amended its articles of incorporation to create "Preference Shares, Series 2022-B" and "Preference Shares, Series 2022-C". These preference shares are designed to be automatically issued upon the conversion of US$500,000,000 of 7.375% Fixed-to-Fixed Rate Subordinated Notes Series 2022-B and US$600,000,000 of 7.625% Fixed-to-Fixed Rate Subordinated Notes Series 2022-C, respectively. The filing also confirms the completion of the offering of these "Notes" on September 20, 2022, under the company's existing shelf registration statement. The new preference shares will carry cumulative dividends at rates equivalent to the interest rates of the corresponding notes, payable semi-annually, subject to the terms of the Canada Business Corporations Act and any applicable withholding taxes. This move represents Enbridge's strategy to manage its capital structure and potentially diversify its funding sources.

Key Highlights

1Enbridge Inc. amended its articles of incorporation to create two new series of preference shares: Series 2022-B and Series 2022-C Conversion Preference Shares.
2These new preference shares are linked to the automatic conversion of newly issued subordinated notes: US$500 million of Series 2022-B Notes (7.375% interest) and US$600 million of Series 2022-C Notes (7.625% interest).
3The company announced the completion of the offering for these Subordinated Notes (Series 2022-B and 2022-C) on September 20, 2022.
4The Conversion Preference Shares are entitled to cumulative preferential cash dividends at rates matching the interest rates of their corresponding Notes.
5Dividend payments on the preference shares will be made on semi-annual payment dates, subject to declaration by the board and statutory/tax regulations.
6The offering was conducted under Enbridge's previously filed Form S-3 Registration Statement.
7The filing includes various exhibits detailing the underwriting agreement, supplemental indentures, forms of global notes, and legal opinions concerning the validity of the notes and preference shares.

ENBRIDGE INC 8-K Report, Bylaw Amendment (Sep 20, 2022)

Summary

Key Highlights

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